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Thursday, 23 July 2015

A few brief macro thoughts...

...busy corporate earnings day today so here are a few brief macro thoughts today.

Greece - Greece's parliament approved the next element of the bailout package at 4am local time in Athens. Whilst a Greek Gov’t Spokeswoman said a ‘Rupture In
Syriza Party Is Obvious’, 'only' 36 SYRIZA MPs failed to support this week's bill vs
39 last week apparently.

European debt – record new European debt levels -
‘Across countries that use the euro, average debt to gross domestic product
reached 92.9 per cent in the first quarter of 2015, up from 92 per cent in the
previous quarter and 91.9 per cent in the same period last year, according to
figures from Eurostat, the EU's statistical agency. Greece remains Europe's
most indebted nation, with debt equal to 169 per cent of annual GDP, but Italy,
Belgium, Cyprus and Portugal also carry government debt that exceeds 100 per
cent of economic output’ (Fast FT). Hmmm.

Ukraine – with the economy expected to contract more
than Greece’s in 2015 worrying that Ukraine's inflation rate is running at 57%,
the world's third highest by some estimates after Venezuela and South
Sudan. A disturbing report here on the underlying economy there. Surely a debt restructuring required in the Ukraine...

China - as per a WSJ report, the well-known hedge fund Bridgewater Flips View on China: ‘No Safe
Places to Invest’. Hedge fund that previously was very bullish warns that
recent stock gyrations will have broad, negative repercussions. Maybe it was because they were bullish before but to me I remain a little more opportunistic in mindset towards the country.

Australia - interesting iron ore related chart...you can see why there is lots of focus on the commodity